Banks must unfreeze accounts while retaining disputed sums in fixed deposits pending Magistrate orders.

The petitioner sought, among other reliefs, the unfreezing of his Canara Bank savings account, which had been frozen in connection with a disputed amount of ₹1,014. He asked that this amount be retained in a fixed deposit or lien account while he was permitted to operate the remaining balance and use associated banking services; he also sought unblocking of his PAN.

Relying on *Malcolm Murayis & Ors. v. State Bank of India & Ors.*, W.P. No. 1100 of 2024, decided on 26 April 2024, the petitioner submitted that the same approach should apply.

The Court considered the precedent and disposed of the petition.

Whether the petitioner’s bank account should be unfrozen while the disputed amount of ₹1,014 is separately secured pending action by the competent Judicial Magistrate.

Whether the *Malcolm Murayis* directions concerning disputed amounts in accounts frozen at the instance of cybercrime authorities should apply to this case.

The Court applied its decision in *Malcolm Murayis & Ors. v. State Bank of India & Ors.*, which directed banks to place the disputed amount in fixed deposits and permitted liquidation only after orders of the competent Judicial Magistrate within three months; if the investigating agency did not proceed within that period, the amount could be withdrawn by the account holder under intimation to the agency.

In the present case, the Court referred to the police agency proceeding under the relevant provisions of the BNSS or any other law relied upon.

The Court considered the petitioner’s case covered *mutatis mutandis* by *Malcolm Murayis*.

Applying that precedent, it directed that the disputed ₹1,014 be secured in a fixed deposit, subject to the competent Judicial Magistrate’s orders within three months. If the police agency failed to proceed within that period, the petitioner could withdraw the amount under intimation to the agency. The Court also directed that the petitioner’s bank account be unfrozen.

It directed the bank to unfreeze the petitioner’s account and place ₹1,014 in a fixed deposit, to be liquidated only after orders of the competent Judicial Magistrate within three months; failing such action, the petitioner may withdraw that amount under intimation to the police agency.